AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 600
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 80IB(10) of the Act. 3. The learned Commissioner of Income Tax (Appeals) erred in holding that the D.P Road passing through the plot is to be considered as part of area of the plot for claiming deduction u/s.80IB(10) of the Income Tax Act, 1961. 4. The learned Commissioner of Income Tax (Appeals) erred in allowing assessee's claim of deduction u/s.80IB(10) of the Act when the assessee had not completed the project within the time stipulated thus violating the provisions of section 80IB(10) of the Act. 5. The appellant craves leave to add, alter or amend any or all the grounds of appeal". 3. In ITA No.602/PUN/2016, the assessee has raised following grounds of appeal: "1.The Ld. CIT(A)-3, Pune erred in law and on facts in sustaining disallowance of deduction u/s.80IB(10) of the IT Act, 1961 to 20% (proportion of 12 flats to total 60 flats) of Rs. 2,36,87,505/- i.e. Rs. 47,37,501/- without considering the factual matrix of the case, case laws produced and submission made. 2. The Ld. CIT(A)-3, Pune erred in law and on facts in not appreciating that 12 flats on the fifth floor were also completed and possession of all these 12 flats were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not been granted by PMC, in fact, these 12 flats are constructed and completed as per approved building plan. The assessee has placed on record electricity bills and property tax payment challens for these 12 flats and has placed reliance on the decision of the Hon‟ble Bombay High Court in the case of CIT Vs. Hindustan Samuh Awas Ltd. (2015) 377 ITR 150 (Bom.) for the proposition that where the application was filed in time the delay in obtaining the completion certificate was not attributable to the assessee and he cannot be penalized. 7. The Ld. CIT(Appeals) observed that the facts of the instant case are distinguishable from those before the Hon‟ble High Court in as much as here though the application was made in time the Municipal Corporation knowingly did not grant completion for 12 flats on which it had some objection. It is quite clear from the scheme of the section as well as the various High Court pronouncements and also the recent decision of the Hon‟ble Supreme Court in the case of CIT Vs. Sarkar Builders, CA No.4476 of 2015 that the project has to commence as certified by the local Municipal Authorities and its completion also has to be certifie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee was incapacitated to complete the same in time due to reasons beyond his control. Assessee should not suffer for same. The revision of plan is vested right of assessee which cannot be taken away by strict provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restriction thereon too/ has to be construed strictly so as to advance the object of provision and not to frustrate the same. The provisions of taxing statute should be construed harmoniously with the object of statute to effectuate the legislative intention. In view of above facts and circumstances, we hold that assessee is entitled for benefit u/s 80IB(10) of the Act in respect of 173 flats completed before prescribed limit. The Assessing Officer is directed accordingly." 8.2 In view of above, it is clear that assessee received approval for C building from PMC vide certificate dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion certificate obtained from the concerned authority and therefore, the deduction u/s.80IB(10) of the Act has been rightly denied in respect of those 12 flats. The facts further demonstrate that the assessee has accepted disallowance made by the Assessing Officer for assessment year 2009-10 and paid the entire demand and has not filed an appeal against that order. The Explanation of the provision clearly states that "the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority." This signifies that in order to get deduction under the relevant provision, after completion of the project, completion certificate has to be obtained from the concerned authority i.e. Municipal Corporation etc. which cannot be done away with. This becomes the fundamental requirement of this provision since prior to receiving the completion certificate whatever work is done, it cannot be said that the project has been completed and there has to be some authoritative check and finding about the completion of the project which is thereafter fit for residing etc. Therefo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as follows: "we are not in agreement with such an approach of the revenue authorities. To give strength to our reasons for such disagree- ment we hereby refer one of the point as explained in the CBDT circular cited in 276 ITR 170 (statute), wherein the guidelines issued were as follows : "Extension of the time-limit for obtaining approval of housing projects for the purpose of tax holiday under section 80-IB, and allowing deduction for re-development or reconstruction of existing building in slum areas. This section does not specifically provide area limit for the garden, the development plan roads, internal means of access, etc., in the housing project. Therefore, the same should conform to the project plan approved by the local authority in accordance with the regulations in force. Also, the area limit of the plot has to be construed with reference to the area of the site on which the housing project is constructed and not with reference to the demarcation of land done by the land development authority." 9. This circular thus gives a clear indication that though the section do not specifically provide for the Development Plan Roads or grant of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g to the clause (b) to section 80-IB(10) of Income-tax Act. Nothing more can be added hence we have to restrict the interpretation that the area of 1 acre should be available for the housing project inclusive of amenities required to be set apart as per the norms of a Corporation. Therefore a justifiable conclusion is that when there is no doubt more so it is not in dispute that a portion of the land, in the present case it is 15 per cent, to be earmarked or set-apart or reserved or segregated out of the total and in question, minimum 1 acre, meant for the purpose of project in terms of rules/regulation of a local body, i.e., Pune Municipal Corporation, and without that segregation the project could not be sanctioned then that portion being mandatory for amenity purposes has to be taken as a part and parcel of the land available for the project. In the present case since the area available for the housing project was 4600 sq. mtr. that is more than 1 acre (4046 sq. mtr.) therefore the appellant is entitled for the claim of deduction under section 80-IB(10)(b) on this portion of land. We hold accordingly." The judgment quotes the CBDT Circular which states that - "....